Posted by John Behle on November 19, 1998 at 22:02:46:
You could create and sell a note to build a property, but you would need one of two things. One would be enough collateral in the land that you could satisfy the note investor as far as a decent LTV ratio.
You could also do it if you could find a creative investor that would be willing to loan money over a period of time like a contruction loan. This isn’t too likely, because most of the note brokers out there are not dealing with their own funds. A creative local broker would do it if they have control of the funding they use, but there aren’t too many of those types of brokers around anymore.
Using private financing to build a property can be a more costly and complicated approach than a normal construction loan.
There are "“pre-fab” type homes out there that will provide financing of the new home if you put up the lot. You can do that if you get a subordination agreement on the lot financing. This is done quite commonly.
Another approach is “Backsiding paper” that I mentioned in a lower post that is used by land developers constantly.
More details might lead us to a more specific approach if you would like to provide some.